Benefit claimants are subjected to an unacceptable “postcode lottery” that can determine whether or not they are driven into poverty by sanctions, MPs have said.
A report by the public accounts committee found that some Work Programme providers and jobcentres withhold payments to twice as many people as others in the same area.
Sanctions are a punishment applied to benefit claimants adjudged to have infringed jobcentre rules. If claimants fail to turn up for appointments or to apply for enough jobs, officials effectively fine them by stopping their benefit payments for a minimum of four weeks, equal to about £300 for a claimant over 25.
The report by parliament’s spending watchdog, published on Tuesday, urges the government to review the use of financial penalties, which it finds “have increased in severity in recent years and can have serious consequences” such as forcing claimants into homelessness.
It says the Department for Work and Pensions has poor data with which to evaluate what works and is unable to estimate the wider impact of sanctions – including their overall cost or benefit to the public purse.
The MPs write: “There is an unacceptable amount of unexplained variation in the department’s use of sanctions, so claimants are being treated differently depending on where they live. It does not know whether vulnerable people are protected as they are meant to be. Nor can it estimate the wider effects of sanctions on people and their overall cost, or benefit, to government.”
A scathing report in November by the National Audit Office found sanctions varied “substantially” across the country.
More than 1 million unemployed claimants have to meet certain conditions, for example showing they are looking for work, in order to receive benefits such as jobseeker’s allowance, employment and support allowance, universal credit or income support.
Almost a quarter of claimants between 2010 and 2015 received a sanction, the NAO report said.
In the public accounts committee report, MPs called for the DWP to trial the idea of issuing warnings for first offences and to monitor variations in sanction referrals.
The department must report back on improvements in the records it keeps and work to estimate the impact of sanctions on claimants as well as the wider costs to government, they said.
Meg Hillier, who chairs the committee, said sanctions had been used as a blunt instrument by government. “It is an article of faith for the Department for Work and Pensions that sanctions encourage people into work. The reality is far more complex and the potential consequences severe,” she said.
“Sanctions and exemptions are being applied inconsistently, with little understanding of why. Some people who receive sanctions stop claiming without finding work, adding to pressures on other services.”
She added: “Suspending people’s benefit payments can lead them into debt, rent arrears and homelessness, which can undermine their efforts to find work. A third of people surveyed by the charity Crisis who were claiming housing benefit had this stopped in error because of a sanction – an appalling situation to be faced with.
“All of this highlights the need for a far more nuanced approach to sanctioning claimants, with meaningful measures in place to monitor its effectiveness.”
Alison Garnham, the chief executive of the Child Poverty Action Group, said the report shows that the DWP is operating in the dark on sanctions.
“The department appears to have little idea what happens to sanctioned claimants nor why there are wide variations in rates of sanctioning. Sanctions can inflict destitution; we should surely expect their administration to be backed by evidence. The case for a full-scale DWP review of sanctions is now irrefutable,” she said.
A DWP spokesperson said: “Our sanctions guidance is the same right across the UK and the fact is the number of sanctions has more than halved in recent years. Sanctions are an important part of our benefits system and are only used in a very small percentage of cases as a last resort when people don’t fulfil their commitment to find work.”
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